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Friday, November 21, 2008

Some Ramblings on the Economy

When I watch the stock market plunge and read about autoworkers on the precipice or someone having their home foreclosed on my heart goes out to millions. On the other hand, I also recognize that the good times that we Americans have enjoyed since the Greatest Generation bequeathed us the benefits the American Century and more has been a free ride.

There was a time when unions were necessary to protect the workers. Now unions simply stuff their pockets, make unmeetable demands and consider themselves social engineers throwing the working man's money toward any cause that pops up on a Democrat's "to do" list.

When I see the stock market nearly halve in value I sense that it is only back to where it should have and would have been in the real world of our fathers and grandfathers, when wealth was not an entitlement, credit was used judiciously, progress was made in increments and as a result of effort, learning from mistakes and making improvements in self and product.

Since the dawn of the Modern Liberal Era success is a function of entitlement, with everyone entitled to a house whether they can afford it or not (Fannie Mae), huge bonuses whether the company performs or not ( golden parachutes, etc), good grades in school even if they are wholly illiterate (grade inflation and social promotions).In the Modern Liberal era every child is "entitled" to "self-esteem" without having to do anything estiimable.

Union workers are "entitled" to paid vacations and sick days and federal holidays and time off if they want to have a baby. Workers are entitled to artificially inflated wages from "minimum" to union wages to the CEOs mentioned above.

Add to this new billion -- if not trillion -- dollar schemes because everyone is "entitled" to state-of-the-art health care and because everyone (including gang-bangers and the illiterate) are "entitled" to a four year vacation where they, too, can binge drink, projectile vomit and "go wild" for the cameras because "every child is ENTITLED" to go to college and you have an economy that cannot sustain what we were bequeathed and in fact, must -- simply must -- continue to plummet into just another one of those once great nations that you read about in history books.

Until we return to a merit-based society we will continue to decline and not all that long from now, crumble. Rewards are not an entitlement -- rewards are indications of work well done. No nation has even been a perfect meritocracy -- no nation has ever been a perfect anything. But America is the closest the worl has ever come and it's not a coincidence that we were -- until recently -- the most prosperous and successful nation in human history. Nor is it a coincidence that it is but forty years into the Modern Liberal era that we are seeing such a rapid decline.

Autoworkers need to be paid what they have earned. So too do their bosses. Children need to be graded according to their skill and effort and only children who show by their work and their efforts that they have learned (and have a desire to learn) should be promoted to the next grade and given, when needed, assistance to go to college (something that should come from the private sector, not the government but that's the stuff of another piece.)

Without merit-based rewards there is no incentive to better yourself, to save for a downpayment on a home, to go to night school, to forgo the party to study for the exam or to make the company run well. Perhaps if the car companies are allowed to go under, to have to start from scratch, they'll make a car that merits our buying it, they'll pay their workers what their skills and efforts merit, their CEOs will be rewarded based on their accomplishments and we can begin a second American century.

17 comments:

My father retired (due to devastating cancer) from GM after 35 years as a factory worker and my grandfather retired from GM in the 80's (and has since passed) and for those of you think I'm going to give some teary-eyed report about how my dad might lose his pension and health insurance, then don't bother reading this.

I believe the gov't should just let the big 3 file bankruptcy so that union contracts can be renegotiated. As a child of a union worker I remember getting mail all the time from the union about how swimmingly the Democratic party was and how they did so much to support the union and I remember my dad tossing the propaganda in the trash as soon as he got them, but I was always a nosy child so I fished them out and read them.

My dad was a Republican because his union's political affiliation was not commensurate with his beliefs as a person who could think for himself. As a young uninformed person, he voted Democrat for the first couple of elections that he worked there until he started figuring out what the Democrats stood for and then he simply couldn't stand by them any longer. He was for smaller gov't, tax breaks, against abortion etc.

unions are killing the free market. Workers who otherwise, at a normal job, should be fired, get a free ride. If you come in drunk to work-you don't lose your job because the union takes care of that. Guys would smoke pot on their lunch break, bring liquor in their thermos, steal things, whoop and holler when a woman walked by, not show up for work for days, fall asleep on the job and a lot of other things and they got by with it because of the union. The union makes it virtually impossible to get rid of someone. Yes, some people get fired, but it takes a LOT to get to that point.

The only reason the gov't is going to bail them out is simply because the UAW is worth a lot of Democratic votes.

My father is not worried. For some of us principle is more important than the pocketbook. If he were to lose his pension and health insurance (which I doubt even in a bankruptcy) then I would probably have to do more for him and he'd have to get medicaid I guess, because he is in the 1st stage of Alzheimer's.

The thing is-he doesn't feel entitled like most of his former co-workers. He votes on principle just like my husband and I do.

I never considered the economy the MAIN issue when I voted. I considered freedom and morals and free speech more important. What good is a booming economy if you give up liberties to attain it? I'd rather live free and poor than wealthy and repressed and that is how I was raised and how I'm raising my children. I don't feel entitled to anything. I work hard at my job even when no one is looking. I don't expect anyone to give me anything. We bought a house when we could afford it, which took us years of living in an apartment.

Liberals are wrecking everything! they take away a man's pride and self respect and replace it with a hand out or a bail out. People need to get back to basics and that includes buying within their means. We have one credit card with a very low balance. We use it for things that you have to have a credit card for like hotel stays or rental cars. We buy things when we need them and once in a while we splurge by buying a new computer or guitar for our son, or a newer video game console.

I wish everyone lived like that and there would be less crime, less greed, no need for bail outs or much welfare, but sadly, it's easier to get in a hole and then ask for a hand out or a bail out.

Thank you for your thoughtful comments, I hope thinks work out OK for you and your dad.

Once upon a time and maybe still in some situations I can understand that there have been benefits to unionization. But where there's a true "marketplace" for people to sell their labor why would you need a union? In a free labor market you get paid what your worth or what you're willing to accept, if you want more you do more or improve yourself.

Unions have their place but in the Big 3 they were able to go too far. There are lots of high quality cars being made in this country by people who are not unionized. I don't totally blame the unions, the big 3 have made tons of mistakes too. The whole mess is disfuntional and needs a "do-over". The Congress will only let that happen if the unions are kept happy at the expense of really fixing the problems.

WP, it will probably be harder for your family than your father. Except that in the early stages there is still the awareness of the loss that is happening, and it can cause some fear and anger. It's important to be positive and not dwell on what is lost but on what remains and play up to that. This is the voice of experience.

On the post, there is clearly a tipping point in a society with universal suffrage, when half the population is receiving benefits and the other half is paying the taxes that supply those benefits. Clearly it is not a stable situation. In engineering speak it would be called a positive feedback system.

One suggestion to reintroduce some stability (negative feedback) would be to trade suffrage for welfare. Anyone receiving government benefits would have to give up the vote.

So, this is what is left of the right. After all the disasters caused by their silly, market religion, and the monstrous deficits, and their second depression, they still can't come to grips with reality.

Nothing but the ability to spout the same tired, discredited old bromides.

That's very reassuring, really; no chance they'll ever make a comeback with that stale old material.

The latest Gallup poll shows that the Republican Party as an institution has a 61% unfavorable rating, with only 34% favorable. And the numbers have only gone downhill since the election -- in October they were at 40% favorable and 53% unfavorable.

But it actually gets worse for the GOP from there.

A separate question in the data set showed 59% of Republicans saying the party needs to be more conservative, compared to only 12% who say the party should be less conservative. So not only is the pool of Republican voters shrinking, but the ones who remain are really nuts.

We could be seeing the emergence of a pattern common in democracies, when a ruling party is turned out of power in a landslide: The folks who are left to pick up the pieces are often the most extreme elements, and are in fact the least fit to actually clean things up. The best examples of this are probably the UK Labour Party after they were beaten by Margaret Thatcher in 1979, the Conservative Party after Tony Blair finally ousted them in 1997.

Corker asked Rick Wagoner, CEO of General Motors, why with all of the measures he has taken to prevent a collapse, his company was still not making money.

“Is it because of the (United Auto Workers) union?” Corker asked pointedly.

Wagoner, who demurred from answering directly, said that even at plants that are closing, “85 percent” of union employment benefits still “have to be paid.” He said that GM has had to restructure and reduce the cost of operating in the U.S., but the company still pays for employees that are not currently working at “idle facilities.”

Chrysler Chairman Robert Nardelli, facing a similar question from Corker, confirmed that “agreements are in place” between Chrysler and UAW that, regardless of demand, Chrysler must still operate at a pay rate of 95 percent of wages for employees not currently working at idle facilities.

Peter Morici, a professor at the University of Maryland’s school of business, told CNSNews.com that one of the biggest problems the companies face is the UAW’s Jobs Bank – a program established more than two decades ago that guarantees nearly full salary and benefits to out-of-work employees.

“Right now if a plant closes in St. Louis and a new one opens in Kansas City, the workers don’t have to move from St. Louis to Kansas City; they can opt to get a $105,000 payout or go on Jobs Bank where they can collect 95 percent of pay for the rest of their lives,” Morici said.

Yes, union workers are certainly entitled to the pay they earn while WORKING... but 95% of pay and benefits for LIFE for doing NOTHING???

Mr. Obama has been going to the jim every Sunday to workout instead of atending church as every good president has done for cneturies. This shows all ready the bad mistake that was made by electing him if that is what happened without the democrat cheating. This demonstrates why G-d will still announce Mrs. Sarah Palin in the Whitehouse before long.

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